Technology transfer agreement

The technology transfer agreement is the contract by which one party, the provider, makes available to another, the recipient, a technology protected by patents, know-how, software or designs, so that the recipient can produce or market products incorporating it. The notion covers several instruments: the patent licence, the assignment, the know-how communication contract and research and development agreements. The technology transfer agreement is an unnamed contract, subject to the ordinary law of obligations and to the special rules of each right transferred.

The essential clauses of the technology transfer agreement

First, the precise definition of the transferred technology: titles, territories, fields of use, documentation and technical assistance. Second, exclusivity or its absence, the duration, the royalties and their basis, the provider’s warranties as to the validity of the titles and the absence of infringement of third party rights. Third, the clauses on the improvements made by each party, on confidentiality, on the conduct of infringement actions and on the fate of sublicences. Fourth, the end of contract clauses: return of the documentation, cessation of the use of the know-how, sale of remaining stock.

The framework of competition law

Technology transfer agreements are examined in the light of the prohibition of cartels. The European Union has adopted a block exemption regulation which presumes lawful, subject to market share conditions, agreements that do not contain hardcore restrictions, such as resale price fixing or certain output limitations. No-challenge clauses on the validity of the titles and absolute territorial restrictions call for particular vigilance. The texts are available on the website of the European Commission. In French law, the contract may also be recorded in the National Patent Register in order to be enforceable against third parties.

Key points

In practice, the technology transfer agreement must anticipate litigation: validity of the titles, proof of the transferred know-how, fate of the improvements and procedure in the event of infringement by a third party. The firm drafts and negotiates these agreements and acts in the disputes arising from them, as presented on the page contracts.